'No regrets' about unsuccessful ultimatum

It came down finally that AstraZeneca’s board has a totally different idea of what their value is compared to ours.

At that point it made sense to be transparent. We made a series of offers and we went full and final because we could not get engagement on any substantive issues.

During the conversations with Leif [Johansson] and Pascal [Soriot], they were always very courteous and listened. We got the sense they definitely wanted to remain independent and simply didn’t believe we were offering them value.

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Absent a change in Astra's view of [its] valuation there was no basis for a transaction.

It was not a must-have which afforded us to be very disciplined so we walk away with no regrets in that we offered a full and fair value and if AstraZeneca's board had substantially different opinion we really have no regrets in saying that was our full offer

We offered £53.50 [per share] and we arrived at the conclusion that the AstraZeneca board would not enter negotiations with us at any reasonable price so our only strategy left was to [put out the final offer].

That offer was our full and final offer so it was a no-regrets move. When we made the £55 [per share offer] I was hoping that would make the AstraZeneca board believe that was genuine full offer that we would not go any further. Under the takeover code we could not change that and I hoped that would be sufficient for AZ board to engage with us.

We did not misread AstraZeneca's shareholder base...

We got strong signals from our interaction with most of their shareholders. Most of them encouraged us that they a bid above £50 [per share] would be well received and they would expect AstraZeneca to engage.

..and we never wanted to go hostile

We have continued to believe that benefits to all stakeholders could only be achieved through a constructive, cooperative engagement that would lead to a friendly recommended deal for the companies' shareholders. We were not interested in putting our shareholders through a hostile offer.

The failure of the deal is a 'missed opportunity' for Britain

There’s a lost opportunity to both [sets of] shareholders. This combined company would have produced more value for combined shareholders than AstraZeneca can do on its own, otherwise we wouldn’t have made the bid.

But wouldn’t believe it would have been fair to my shareholders [to go with a higher offer].

I think its regretful because long term there was a missed opportunity to have largest pharmaceutical company in the world domiciled in UK, committing 20pc of R&D over a longer period. That would have been very healthy for science and manufacturing. That would have been shown over the medium to longer term.

I have 'utmost respect' for the UK Government...

There was a general wish by government, and I understand that, to ensure the effort they have been making to build up the science base in UK was respected. We went out of our way to meet those concerns.

[But the] best process was to let the market process work.

I have utmost respect for Jeremy Heywood and John Kingman who were appointed to have discussions with us and also for Vince Cable and David Willetts. It was never a negotiation it was just a discussion. They were concerned about how to preserve the science and scientific base and they were making points to us on ways we could reassure them and, they felt, the British people, that we would be good corporate stewards in the UK.

I don’t think the politics was a problem. We were treated with respect by the Government. They were very serious. They made clear where they stood about their expectations that we were serious investors.

...but they are 'inconsistent' on drug research

It is inconsistent to me [for the] Government to wish to have a vibrant science centre and vibrant investment in clinical research, and yet not to have big market incentives. They’re rightfully proud of the work being done in oncology, yet the UK is one of the countries that has the lowest reimbursement [of] and access to oncology products.”

Through Nice (National Institute for Health and Clinical Excellence) the Government needs change what it’s willing to pay for the quality-adjusted life years (QUALY). It’s extremely low. I think Nice could be reformed to take account of more of the full societal costs involved in illnesses. That would show the full value of modern medicines. At same time British society has to decide whether £20,000 or £30,000 is the right value they want to put on an extra year of quality life.

AstraZeneca is not a 'British' company

I don’t think [politics] influenced [the eventual failure of the deal] at all. It was part of Astra’s strategy to paint themselves as a British company that was part of their defence.

AstraZeneca is domiciled in the UK. It’s a global company like any pharma company. It has a huge presence in US, it’s made up of a Swedish company, a British company and then they bought an American company.

Global companies do their research where there is great academics and great science so they have research centres in the US, the UK and Sweden.

The UK's takeover rules are not fit for purpose

We approached AstraZeneca in November, it was kept confidential. They [rebuffed our offer] back in January. We at that time out our tools down and then in April there was a leak and given we now had clinical data out on some of our products I reinitiated the conversations with Astra.

At that stage because of takeover rules we had to make that approach public. That’s problematic because that swings you into this 28 day in public spotlight. So I think our conversations from then onwards we never really got engagement beyond talking to the chairman. There was never any willingness or wish to do due diligence. [After several conference calls with the chairman] who rebuffed our approach we felt the only way was to make a full and final offer.

[The UK] takeover rules are not very conducive to getting to the right solution for shareholders. [They are] overly complicated and overly bureaucratic. I understand they were put in place to be in best interest of shareholders. I don’t necessarily believe they serve that function.